Bitcoin Joins DeFi in a Big Way: 1% Supply Now Locked Up!

• Bitcoin’s integration with DeFi grows as 1% of its supply is now locked in DeFi platforms.
• Institutional interest surges, with BlackRock and spot ETFs showing strong confidence in Bitcoin’s potential.

Bitcoin’s integration into decentralized finance (DeFi) is accelerating, with new data suggesting that 1% of BTC’s total supply is now locked in DeFi systems, according to IntoTheBlock data. The introduction of Coinbase’s new Bitcoin-pegged token, cbBTC, and increased demand for Bitcoin yields are the main factors driving this move.

This development represents a deeper connection between Bitcoin and the DeFi ecosystem, providing holders with additional ways to access DeFi applications on the Ethereum and Base blockchains via cbBTC.

1% of Bitcoin’s supply is now locked in DeFi, driven by growing demand for Bitcoin yield and Coinbase’s new Bitcoin-pegged token, $cbBTC pic.twitter.com/e7mbo4FLJS

— IntoTheBlock (@intotheblock) September 29, 2024

cbBTC: The Fast-Rising Star in Bitcoin-Based DeFi Solutions

Coinbase’s Bitcoin-pegged token, cbBTC, has swiftly become a market leader. According to IntoTheBlock data from five days ago, cbBTC already accounts for an impressive 49% of total wrapped Bitcoin volume, capturing the top rank only two weeks after its start.

Source: IntoTheBlock

This quick adoption demonstrates the growing need for Bitcoin-based DeFi solutions and Coinbase’s success in integrating Bitcoin into the larger DeFi industry.

The development of cbBTC has given Bitcoin holders an effective mechanism to leverage their assets in DeFi protocols, broadening Bitcoin’s utility beyond traditional investing opportunities.

On the institutional front, Bitcoin remains popular, with recent reports indicating a big increase in Bitcoin spot ETF inflows. CNF previously revealed that spot Bitcoin ETFs saw net inflows of $494 million, the highest single inflow since June 4.

Ark Invest and the ARKB 21Shares ETF, which led the way with a $203 million inflow, were primarily responsible for this spike. Such large investments demonstrate institutional investors’ growing trust in Bitcoin’s potential as a long-term asset.

Adding to the momentum, as we previously highlighted, BlackRock has increased its position in the Bitcoin market by buying an extra 1,413 BTC. This decision underscores BlackRock’s sustained confidence in the crypto sector, firmly positioning the asset management behemoth as a prominent player in the Bitcoin investment space.

BlackRock’s recent acquisition underlines its commitment to Bitcoin, demonstrating the growing trend of big financial institutions adopting digital currencies.

However, despite favorable improvements in both the DeFi and institutional sectors, Bitcoin’s price has recently declined. Bitcoin is currently trading at $63,602.51, down 3.01% over the last 24 hours.

This dip comes after a period of bullish momentum in the previous days, but it has now transitioned to a selling pressure phase.